Federal Government Civil Forfeiture Plays Key Role in Cross-Border Litigation

U.S. government civil forfeiture of foreign assets is in the news:

  • The United States is blocking $30 billion in Libyan government assets since President Obama announced his executive order imposing unilateral sanctions against Col. Muammar el-Qaddafi and his family. It is the largest amount of foreign assets ever seized in an American sanctions action.
  • As a suspected kleptocrat, Tunisia’s Former President Zine al-Abidine Ben Ali could be the target of asset forfeiture, not just in the U.S. but globally, as well.  Earlier this year, Reuters reported that Ben Ali’s family is thought to have possibly diverted $66 million in gold from Tunisia to Switzerland.

But forfeiture targets are not always as recognizably iniquitous as Qaddafi or al-Abidine, so when the massive power of the U.S. government is brought to bear against foreign asset holders, these people have a right to reliable legal representation.

Attorneys at Hornberger & Brewer handle cases in which the United States government has seized foreign assets, thereby depriving the asset holder of the asset.  We can file and litigate claims against the government to release the asset from seizure.

Understanding Asset Forfeiture

Asset forfeiture is confiscation, by the state, of assets which are either:

(a) the alleged proceeds of crime, or

(b) the alleged instrumentalities of crime, and more recently, alleged terrorism.

Instrumentalities of crime are property that was allegedly used to facilitate crime, for example, cars allegedly used to transport illegal narcotics. The terminology used in different jurisdictions varies.  Some jurisdictions use the term “confiscation” instead of forfeiture.

There are two types of forfeiture cases–criminal and civil.  Criminal forfeiture is usually carried out in a sentence following a conviction and is a punitive act against the offender.

Almost all forfeiture cases practiced today are civil.  Since the government can choose the type of case, a civil case is almost always chosen.  In civil forfeiture cases, the U.S. government sues the item of property, not the person–the owner is effectively a third party claimant.  Once the government establishes probable cause that the property is subject to forfeiture, the owner must prove on a “preponderance of the evidence” that it is not.  The owner need not be judged guilty of any crime.

The costs of such cases is high for the owner, usually totaling around $10,000 and can take up to three years.

Forfeiture Law for Foreigners at the Federal Level

The “Preserving Foreign Criminal Assets for Forfeiture Act of 2010″ amended federal forfeiture law regarding the enforcement of a foreign judgment to allow the U.S. government to apply for, and a U.S. district court to issue, a restraining order to preserve the availability of property located in the United States that is subject to civil or criminal forfeiture under foreign law, at any time before or after the initiation of forfeiture proceedings by a foreign nation. Prior law allowed a restraining order before or after the United States files an application on behalf of a foreign nation seeking to enforce a foreign forfeiture or confiscation judgment.

In July 2010, a federal appeals court in Washington refused to expand the U.S. Justice Department’s ability to restrain assets in the United States based solely on a foreign official’s allegation of a violation of the laws of a foreign country.

Three judges of the U.S. Court of Appeals for the D.C. Circuit unanimously ruled against the government’s interpretation of a forfeiture provision that was part of the Patriot Act of 2001.

DOJ attorneys wanted to freeze assets of individuals, including Brazilian financier Daniel Dantas, and entities that include the Opportunity Fund and Tiger Eye Investments.  At the request of Brazilian officials, the Justice Department in 2008 and again in 2009 filed applications in federal district court in Washington seeking to restrain hundreds of millions of dollars.

If justice is to be served in cases of forfeiture of foreign assets, then the asset holders deserve legal representation at the highest levels–HGB Law.

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